Experts and Economics

Why do we trust experts?  I think the obvious answer is that it helps us live our lives practically.  We trust the doctor’s advice on medicine because we don’t have the time or the knowledge to know which medicines to take.  We don’t have time or the energy to check to see if the doctor has got it right.  Thus, we say that a degree is enough to constitute an expert in that field.  We put our trust in experts because they are seen as knowledgeable in that field.  Thus, we go about our lives putting trust in these experts and we have no reason to doubt them (unless something’s fishy).  This works not just in medicine, but in other fields like law, engineering, science, computers, food, and countless others–including philosophy.  Even ideas are given to experts and if there’s something wrong with the idea, then we scrutinize it, critique it, and demur it to make sure that it’s on the right path.  Now we don’t just doubt everything that’s given to us.  But the point here is that trust is the important key element.  We trust these experts because without experts, there would be no progress and we would spend the majority of our lives figuring out if these other people did their job correctly rather than living out our own lives doing our own specialty.

Many of you know that I mainly listen to lectures on my mp3 player.  I usually listen to The Teaching Company.  I highly recommend getting them.  They’re a bit pricey, but I don’t know any library that doesn’t have them.  I have learned a lot since listening to them and it has certainly increased my knowledge of the world.  The last lecture I listened to was Modern Economic Issues.  I can’t stand economics!  I tried to take some classes in college, I really did but I just found it so boring.  Yes, I understand that economics is something important to know.  That’s why I wanted to listen to this lecture so that I can actually learn about it.  At first, my expectations were pretty low.  I thought I’d be extremely bored with it.  I thought I had to concentrate harder just to understand the material.  To my surprise, I actually liked it.  It’s made me gain a new economics perspective.  So what does this have to do with experts?  The last lecture dealt with how to be happy and tying it up with economics.  However, I was actually more intrigued with what the lecturer said about how professional economists recommend something, yet the public is ambivalent to do so.  Alan Blinder states that, “Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently.”  So here’s what I’m getting at.  These professional economists are experts.  They know the field more than anyone and so it seems logical to put their trust into these people economically in order for us to progress and have better lives.  So what issues were they?

1.  Get rid of the penny: There is a consensus among economists for many years to get rid of the penny.  The reason is because Americans don’t find value in it anymore.  (We often tell the clerk that they can keep the penny, and there are pennies in the little compartment next to the cash register virtually everywhere.)  Also, zinc makes up the majority to make the penny but the US Treasury says that zinc is getting so expensive that to make a penny costs more than what it’s worth.  It costs more then one cent to make one cent, in other words.

2.  Let bodily organs be open to the market: In 2007, about 97,000 patients waited for kidney transplants.  Because the demand for these kidneys are so high, 70% of the patients will die just for waiting for a viable donor.  The average wait time for a kidney is three years.  Our economic system is based on supply and demand.  We obviously can’t lower the demand for new kidneys (unless there’s some miracle that would cure these kidney disease), so the other option is to raise the supply.  Now we do have people that donate their kidneys.  But think about it, would you donate your kidney?  Even though it’s a kind gesture, I’m sure most of you are thinking “no.”  So the only incentive to donate your kidney is pure altruism.  However, what if you donated your kidney for $10,000?  (This is just a number I made up.)  I think most of you would probably think about that option for a while.  70% of professional economists think this is a good idea.

3.  Limit Subsidies to Sports Arenas: People say (or perhaps think) that having a sports arena will actually increase the local economy because it’s a nice tourist attraction and it puts the city on the map, it will have a multiplier effect where the economy will grow.  However, professional economists are suspicious of these arguments.  A study shows from 36 cities that have sports arenas and 12 other cities that don’t.  There was no personal income growth for the cities that had the sports arenas.  Another study shows that new stadiums and sports franchises actually reduce per capita income a bit in these cities.  This is because the players, owners, and coaches–who receive the most money–don’t actually spend the money in that city.  Thus, the economy won’t go up that much because they’re spending it elsewhere.  85% of professional economists agreed to limit subsidies to sports arenas.

So what gives?  These are experts.  They are supposed to know their stuff, but it seems that the public doesn’t want to follow this advice.  Any reason for that?  Or are we just too stubborn?

Advertisements

About shaunmiller

I am a Ph. D student at Marquette University. The primary purpose of this blog is to get my ideas out there, and then have other people scrutinize, critique, build upon, and systematize beliefs. This blog will sometimes pertain to what I'm learning in my classes, but it will occasionally deal with non-classroom issues that I'm thinking about as well.
This entry was posted in Economics and tagged . Bookmark the permalink.

8 Responses to Experts and Economics

  1. Killer J says:

    Pretty interesting essay. I agree we should listen to experts in any given field, and your reasoning for doing so makes sense to me. My question is who is it that ignores economists?

    Does the public ignore them? Politicians? I’m not sure I even know a particular economist, or their opinion. Is the media censoring them?

  2. Paul says:

    A better option to the organ donation issue is an opt-out plan, rather than an opt-in plan. In Europe, they have a surplus of organs, because when someone dies, their organs are automatically harvested by default, unless they specifically registered not to donate.

  3. Kyle says:

    Interesting post, Shaun. I think that people don’t listen to economists mainly because they don’t understand them. Like you, many people think economics is boring. I used to, and I still do to some extent. In the job I’m working in, I’ve ended up picking up a bit of knowledge about economics, and I’ve been interested in most of what I’ve learned, to my surprise. But since most people don’t know about economics, they don’t understand the recommendations that professional economists make. Also, economists’ recommendations frequently seem to be contrary to common sense. People think that economics should be a simple field, based entirely on common sense, but that is not the case. Economics is highly complex, and takes into account a lot more than most people realize. But, since the results do frequently seem contrary to common sense, people don’t trust them. And finally, I think another reason is that many economists’ recommendations would require people to actively take action and make a change in their lives, and many people are resistant to that simply because they don’t want to change.

  4. shaunmiller says:

    I think Kyle got it right. Beliefs by its very nature are conservative. People don’t like to switch beliefs at will, otherwise we’ll have cognitive dissonance all the time and we couldn’t survive.

    People don’t know much about these issues and when they hear something that seems to go against common sense, they ignore it. Is this rational? After all, these economists are experts. Wouldn’t the rational thing to do is to consider them, or at the very least listen to them?

    What about a different field? Most philosophers, neuroscientists, and psychologists say that dualism is impossible, and the theory is just flat-out wrong. Now these are experts in these fields, yet the public still believes in dualism. What’s going on there?

    21% of Americans believe we should get rid of the penny. But after listening to the arguments, the number increases to 25%. Something’s suspicious with this.

    So yes, the public, politicians, and the government ignores them because they don’t like big changes (perhaps Edmund Burke has something here). Is there censoring? It could. When Greenspan was saying things that sounded a little nontraditional, I think the media downplayed it.

    Paul, I think that’s actually a good idea. Unfortunately, I don’t think people in America will go for it. I think many people will find that too communal whereas the philosophy of America is more individualistic. I think it can be done if the message gets out that you can still consent to opt-out if you choose to do so. Of course, it could be based off of religious preferences then that’s a different story.

    But I guess the overall message is this: when people listen to these experts and they still disagree with these experts, are they just being stubborn, or are they being irrational?

  5. Killer J says:

    I don’t think it is an ‘either stubborn or irrational’ dilemma. At my place of employment, I am the expert. I’m not real comfortable being labeled as such because I’m so new and there’s always new stuff to learn, but that’s besides the point.

    The problem for me is when a particular case comes up and I give my research/experience/best practice protocol-based opinion on a controversial subject, and then promptly get ignored because my opinion didn’t seem to mesh with the status quo.

    Many of my colleagues are old school. They are basing their decisions on what was popular concensus ten, or even twenty years ago! When new information is presented to them (by me) and it clashes with that which they think they no, ol’ cognitive dissonance kicks in.

    Are they being stubborn in their refusal to acknowledge a fresh point of view? Is it irrational to be this stubborn when people’s future lives are on the line? Yes, and hellz yes!!!11

  6. Killer J says:

    By the way, agreeing with you doesn’t feel natural. Post something political.

  7. shaunmiller says:

    It’s interesting that the most controversial topics are always religion, politics, and sex. I’ve already posted on religion and politics, maybe I’ll post something on sex later on.

  8. Pingback: 2004 Election in Retrospect for this Election « Shaun Miller’s Weblog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s